Top drivers of diabetes care costs
In 2012, the American Diabetes Association (ADA) estimated the total economic burden of diagnosed diabetes patients to be $245 billion, which accounts for $176 billion in direct costs and $69 billion in indirect costs. That breaks down to one in 10 healthcare dollars being spent on treating diabetes and its complications. What’s more, one in five healthcare dollars is spent caring for people with diabetes.
According to the ADA, individuals who are diagnosed with diabetes have healthcare costs that are 2.3 times higher than someone who is not diagnosed with diabetes. People with diagnosed diabetes incur average medical expenditures of about $13,700 per year; $7,900 of that is attributed to diabetes.
“The main driver of healthcare costs for diabetes is the increased prevalence of this disease,” says Matt Petersen, managing director of medical information, ADA, which is headquartered in Alexandria, Virginia. From 2007 to 2012, the total cost of diabetes in the United States increased by 41%. Despite this increase in total costs, individual costs of diabetes care have risen less than medical inflation—while total national health expenditures rose by 24% from 2007 to 2012. Per capita diabetes-related costs rose by only 19%. “The difference is that the number of Americans with diagnosed diabetes increased by nearly five million. Increased prevalence, not increased costs per patient, is the driving force behind the increased economic burden of diabetes.”
Breaking down the costs
The largest direct cost of diabetes care is hospitalization, accounting for 43% of costs in 2012. In 2002, hospitalizations accounted for 50% of costs. “People with diabetes are hospitalized at a greater rate and for longer stays than people without diabetes,” Petersen says.
In addition to inpatient hospital care, the ADA reports that the largest components of medical expenditures are:
Prescription medications (18%)
Anti-diabetic agents and diabetes supplies (12%)
Physician office visits (9%)
Nursing/residential facility stays (8%)